Daily deals website Groupon is reportedly set to jack in a controversial accounting metric that it previously considered to be a good way to measure how well the company was performing.
According to All Things Digital, which cites sources close to the matter, Groupon will tweak its S-1 public offering filing to scrub out a …

COMMENTS

Insane valuation

Theres very little barrier to entry. I'm already a member of two of these things and am considering cancelling both as they are very spammy and if you actually take a good hard look at the deals they aren't necessarily that good.

I just don't see it as a sustainably highly profitable in the long term. Its new so getting lots of subscribers and sales but competition will drive the profit margins down to next to nothing (not that they turning a profit yet anyway).

Valuations

Watch the stock take a nose dive

Groupon is a ridiculous proposition from the get go. If reports are true, they're leaving a trail of angry businesses in their wake, moving cash through the back door to satisfy investors, and burning through the rest like nobody's business. It's not even like what they offer is unique or not done by hundreds of other sites. At some point word of mouth will be so bad amongst businesses that the only groupons they'll be selling will be for fish foot massages and little else. When the deals go, so will the people buying them.

Then the hold wobbling hyperexpanded edifice will come crashing down. The IPO investors will be the ones who get burnt. The original investors will have taken the money and run.

We'll all end up paying for it (again).

In the current climate, I can't see any sane IPO investors wanting to buy into the likes of Groupon and Zynga - so the ones who stand to get burned most are probably the underwriters. Do a quick search for 'groupon underwriters' and 'zynga underwriters' for a list of the banks we'll all have to be bailing out next time.

Depends

I expect the idea for the underwriter is they shift their stock before the whole thing collapses. I wouldn't expect Groupon to flop instantly but I do expect it to flop long term. I believe there is too much competition and bad press for them to survive the way they're going.